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UK house prices gather a bit more speed in April – Nationwide

Growth in UK house prices picked up slightly in April, data from mortgage lender Nationwide showed on Wednesday, adding to other signs that a slowdown in the housing market ahead of Brexit might have bottomed out.

Prices rose by 0.9 percent in annual terms, speeding up from a rise of 0.7 percent in March.

That was the biggest increase since November although it was still weak compared with recent trends in the often surging UK housing market – prices were rising by about 5 percent a year at the time of the Brexit referendum in 2016, according to Nationwide.

In monthly terms, prices rose by 0.4 percent after rising by 0.2 percent in March, also the biggest increase since November.

Economists polled by Reuters had expected prices to increase by 0.7 percent in annual terms and to rise by 0.2 percent compared with March.

Robert Gardner, an economist with Nationwide, said first-time buyers appeared to be defying the jitters around Britain’s still uncertain departure from the European Union, helped by low interest rates and the lowest unemployment rate in more than 40 years.

“While the ongoing economic uncertainties have clearly been weighing on consumer sentiment, this hasn’t prevented further steady gains in the number of first time buyers entering the housing market in recent quarters,” he said.

The number of mortgages taken out by first-time buyers was approaching pre-financial crisis levels, the data showed.

While prices have been rising across the country as a whole, prices in London have fallen according to various measures of the market, hit by a combination of unaffordable prices for many buyers, tax changes affecting the buy-to-let market and the Brexit uncertainty which has weighed heavily on the capital’s financial services industry.

British Prime Minister Theresa May last month secured an extension to the Brexit deadline until Oct. 31, avoiding the potential shock of a no-deal Brexit for now but leaving the world’s fifth-biggest economy still deep in uncertainty about how it will leave the EU.

Writing by William Schomberg; Editing by Andrew MacAskill

Source: UK Reuters

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UK house prices growing at slowest pace in almost seven years

Annual house price growth is at its lowest level in almost seven years, with London house prices suffering most.

UK house prices were up by just 0.6% in the year to February with an average of £226,000, a much more subdued picture than the 1.7% increase seen in the year to January.

It marked the lowest annual increase since September 2012 (0.4%) according to the Office for National Statistics, the Land Registry and other bodies who released the figures jointly.

The national slowdown is largely due to falling prices in London and the South East of England.

Prices in London were down by 3.8% in the year to February, faster than the 2.2% decrease seen in the year to January.

In the South East, prices fell by 1.8% during the year.

Mike Hardie, head of inflation at the ONS, said: “Annual house price growth has slowed to the lowest rate in close to seven years.

“Growth in Wales and the west of England was offset by a sustained fall in London and falling prices in the South East for the first time since 2011.”

Jamie Durham, economist at PwC, said “uncertainty around Brexit” was weighing on the capital’s housing market but prices there are still the highest in the UK at an average of £460,000.

He added: “Elsewhere in the UK, however, house prices continued to rise. The highest price growth was in the North West, with annual house price inflation of 4.0%. The Midlands also maintained strong annual house price growth, particularly in the West Midlands, with annual growth of 2.9%.”

Paul Smith, chief executive of Haart estate agents said: “While clarity over Brexit would be helpful – it is not absolutely vital. Although prolonging the inevitable is certainly frustrating, this level of uncertainty has become the new normal, and since the New Year, we have seen buyers sweep their fears under the rug and return to the market.

“Pent up demand has been building for months and Brits are ready to move. The extended negotiation period is not going to stop them.”

Ray Rafiq Omar, chief executive of Unmortgage, said: “There’s a real need to think outside the box to help those who are stuck renting and badly want to own their own home.

“The government needs to take greater steps in meeting housebuilding targets and creating some much needed movement within the market.”

Source: Yorkshire Coast Radio

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UK house prices drop in March amid Brexit uncertainty after shock rise, says Halifax

UK house prices grew 2.6 per cent year on year in March, but fell compared to the month before, according to data released today.

The value of the average UK home hit £233,181 last month, after growing 1.6 per cent between January to March compared to the three months to the end of December.

But house prices dropped 1.6 per cent from February to March, according to Halifax’s latest house price index, to offset a 5.9 per cent surge the bank reported last month that experts viewed very sceptically.

Russell Galley, Managing Director, Halifax, said: “This reduction partly corrects the significant growth seen last month and again demonstrates the risk in focusing too heavily on short-term, volatile measures.

“Industry-wide figures show that the number of mortgages being approved remains around 40 per cent below pre-financial crisis levels, and we know that lower levels of activity can lead to bigger price movements.”

While young people struggle to save up deposits, the combination of fewer homes for sale and fewer buyers has propped up growth, Galley added, underpinning the annual price rise.

However, these factors in addition Brexit impasse currently deadlocking parliament continue to weigh on the housing market, and London house prices in particular.

“These conflicting challenges, when combined with the ongoing uncertainty around Brexit, have had an impact across the country but most notably in London, meaning that we continue to expect subdued price growth for the time being,” Galley said.

Drop corrects ‘bizarre’ Halifax house price rise

Howard Archer, chief economic adviser to the EY Item Club, said last month’s drop corrects the “eye-watering and frankly bizarre” six per cent surge in house prices Halifax suffered criticism over in February.

That contrasted heavily with Nationwide’s own measure of 0.4 per cent growth.

Archer again criticised Halifax’s comparatively volatile measure, pointing to other sharp rises of three per cent in January and 2.5 per cent in December.

“The overall impression is that the housing market is currently soft as it is being hampered by challenging conditions with buyer caution currently being reinforced by heightened Brexit and economic uncertainties,” Archer added.

“The overall picture [is] being dragged down by the weakness in London and the south east.”

Lack of homes hurting buyers’ options

Brian Murphy, head of lending for Mortgage Advice Bureau, said Brexit uncertainty is too easy an answer for the lower level of mortgage approvals.

“The lower levels of homes currently available could be another obvious contributory factor, as this somewhat reduces buyer choice,” he said.

“However, those who are moving home at the moment are likely to find that lender competition has seen rates remain low, providing a silver lining in otherwise cloudy times.”

Lucy Pendleton, founder director of independent estate agents James Pendleton, concurred, saying: “It’s no surprise to see prices fall back this month as low stock levels and general buyer malaise plagues the market.”

London lows continue to drag down UK housing market

Pendleton added that the more reliable annual rise in house prices shows that regions are underpinning the rise, while London lags behind

“There are few signs of improvement in the number of transactions across the capital,” she warned.

“Buyers are understandably showing caution while we remain in this period of limbo, possibly in the belief there will be better opportunities to broker a deal after we leave the EU.”

Sam Mitchell, boss of online estate agent Housesimple, said the market almost looks healthy without London.

“If you take London out of the equation, we are seeing more normal market conditions in other parts of the country, particularly in the north, with healthy levels of transactions during this early spring period, when traditionally there’s more activity in the market,” he said.

Jonathan Hopper, managing director of Garrington Property Finders, said buyers who are committed to London and the southeast are doubling down as they realise momentum is with them.

“Buyers are feeling increasingly emboldened and we’re seeing some very aggressive offers succeed – with sellers who need to move quickly having no choice but to accept big price reductions,” he warned.

Brexit uncertainty continues to weigh down UK housing market

The latest UK house prices show Brexit is still harming the market despite record employment, wage increases and low interest rates, said property lender Octane Capital.

Boss Jonathan Samuels said: “Brexit has torpedoed consumer confidence.

“Strong economic fundamentals count for nothing when the UK body politic is in such fundamental disarray.

“A drought of buyers and lack of homes for sale has been the defining narrative of the property market for the past two years.

“Prospective sellers and buyers alike are holding back as an unprecedented political drama plays out. For most people, the inclination is to play it safe rather than make a move.”

Jeremy Leaf, north London estate agent and a former Rics residential chairman, said the UK housing market is holding up better than expected under the pressure of Brexit, but that the prolonged political problems are hurting activity.

“On the ground, we are seeing more buying activity in the buildup to the traditionally busier spring market but it is patchy, encouraging in some areas, disappointing in others, even sometimes very close to one another,” he said.

“On the other hand, many sellers are still cautious, awaiting a small sign at least that their Brexit nightmare will soon be over and they will have more confidence about taking on additional debt.”

By Joe Curtis

Source: City AM

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UK house prices see further slowdown amid weaker growth in England and Scotland

House prices increased at their slowest annual pace in nearly six years in January as property values tumbled in London but increased relatively strongly in places including the Midlands, Wales and Northern Ireland, official figures show.

England and Scotland saw a slowdown in annual house price growth, while in Wales and Northern Ireland property values are rising relatively strongly.

In Wales, the abolition of the Severn crossing tolls is helping to drive prices up in the south-east of the country, according to the report released jointly by the Office for National Statistics (ONS), Land Registry and other bodies.

Average house prices in the UK increased by 1.7% in the year to January 2019, down from 2.2% in December and the lowest annual rate since June 2013 when it was 1.5%, the report said.

UK house price growth has been slowing for the past two-and-a-half years, driven mainly by a slowdown in the South and East of England.

In London, house prices fell by 1.6% annually, while in the East of England prices fell by 0.2% over the year.

In the East Midlands, prices increased by 4.4% in the year to January 2019, while the West Midlands saw 4.0% growth.

Across the UK, the average house price was £228,000 in January.

ONS head of inflation Mike Hardie said: “While average UK house prices increased over the year, the rate is down from last month, and is at its lowest in almost six years.

“London property prices continued to fall, seeing their steepest drop since the end of the financial crisis, with Wales, the East Midlands and the West Midlands driving the overall growth.”

House prices in England increased by 1.5% annually in January, slowing from 1.9% growth in December. The average house price in England was £245,000 in January.

House prices in Scotland grew at a slower rate than other countries in the UK, increasing by 1.3% in the year to January, down from 2.0% in the year to December, taking the average house price in Scotland at £149,000 in January.

By contrast, house prices in Wales increased by 4.6% annually in January, reaching £160,00 on average.

The report said: “This continues to be driven by strong house price growth in south-east Wales, likely linked to the abolition of the Severn Bridge tolls.”

In Northern Ireland, house prices increased by 5.5% over the year, taking the average house price to £137,000.

Howard Archer, chief economic adviser at EY Item Club said: “Most recent data and surveys have pointed to muted housing market activity, indicating that heightened economic and Brexit uncertainties are weighing down on a housing market that is already under some pressure from overall challenging conditions.”

He continued: “It should be noted that the overall national picture has been dragged down by the particularly poor performance in London and parts of the South East.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “As always, national average house prices conceal significant regional differences.

“London continues to see the largest annual price fall as those worried about the Brexit fallout err on the side of caution.

“That said, the year has got off to a remarkably good start on the lending front despite ongoing political uncertainty.”

He said several lenders have trimmed rates in an effort to encourage more business.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said in some areas the market is patchy at best, whereas in others there is more optimism.

“This is borne out perhaps more in the numerous micro markets of London where local factors are often much more relevant than the national picture,” he said.

“Sadly, while political uncertainty remains, stronger demand is likely to remain pent up at least for a little while longer.”

By Vicky Shaw

Source: Yahoo Finance UK

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UK house prices: Ongoing Brexit uncertainty will hurt housing market, says RICS

UK house prices will continue to plunge this year as prolonged Brexit uncertainty weighs on the market, according to the latest forecasts.

Buyer enquiries, agreed sales and instructions to sell have fallen for the sixth month running, according to the Royal Institute of Chartered Surveyors’ (RICS) latest housing market survey.

Buyers and sellers are both waiting for a resolution to Brexit before committing to a sale, according to the survey conducted in February and released today, with 77 per cent of respondents blaming the political uncertainty.

Buyer demand fell for the seventh month in a row in February as 41 per cent of respondents said buyer enquiries are falling, while agreed sales have been flat or negative since March 2016.

Simon Rubinsohn, RICS chief economist, said: “The latest RICS survey makes it pretty clear that the ongoing uncertainty around how Brexit will play out is the critical factor influencing both buyers and sellers.

“And with little sign that the issue will be resolved anytime soon, it could prove to be a challenging spring for the housing market and the wider economy.”

He added that while it is a buyers’ market now, sellers reluctant to give up higher prices must face reality if they want to agree a sale.

“This environment requires a greater degree of realism from those looking to move,” Rubinsohn said. “A reluctance from some vendors to acknowledge the shift in the balance of power in the market will compound the difficulty in executing transactions.”

Meanwhile the Office for Budget Responsibility (OBR) curt its five-year house price forecast from 20 per cent to 17 per cent yesterday, saying prices will fall in 2019.

By Joe Curtis

Source: City AM

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UK house prices: Experts cast doubt on ‘volatile’ Halifax price hike figures

House prices rose almost three per cent at the start of 2019 compared to the same period last year, new figures revealed today.

Annual house price growth hit 2.8 per cent in the three months to February compared to the corresponding time in 2018, Halifax’s house price index said today – much higher than the 0.8 per cent growth in January.

The value of UK homes rose 5.9 per cent month-to-month, Halifax added, seeing the average UK house price hit £236,800.

Measured on a quarterly basis, growth hit 1.8 per cent as a lack of homes on the market buoyed prices.

Halifax managing director Russell Galley said: “The shortage of houses for sale will certainly be playing a role in supporting prices.

“Annual house price growth at 2.8 per cent is within our expectations, but is fairly subdued compared to 2015 and 2016, when the average growth rate was 8.3 per cent.

“People are still facing challenges in raising a deposit which means we continue to expect subdued price growth for the time being. However, the number of sales in January was right on the five-year average and, at over 100,000 for the fifth consecutive month, the overall resilience of the market is still evident.”

Unreliable indicator?

However, Howard Archer, chief economist to the EY ITem Club, said Halifax’s February jump was “completely off the radar” after Nationwide warned growth was at an anaemic 0.4 per cent.

“The Halifax house price measure has been particularly volatile in recent months and the sharp monthly movements have been out of kilter with other measures,” Archer added.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, agreed, calling Halifax’s jump “implausible”.

“We have little confidence in Halifax’s index as a reliable indicator of the housing market. Its extreme volatility … undermines its validity,” he added.

Lucy Pendleton, founder and director of independent estate agents James Pendleton, called the market volality “a ricocheting bullet”.

“At first glance this monthly surge could be a bout of pre-Brexit confidence but nothing has changed,” she added.

“The more likely answer is that in key areas low supply is squeezing those buyers who have a need, rather than just a desire, to move and just can’t put it off any longer.”

“There is no doubt that the shortage of supply is a significant factor in the uplift,” said Jeremy Leaf, north London estate agent and a former Rics residential chairman.

Will UK house prices rise after Brexit?

Tombs said that while a Brexit deal would revive the housing market, it would only work as a short term fix, warning that it would also lead to a rise in interest rates.

“With loan-to-income ratios at a record high, even modest increases in mortgage rates will greatly dampen house price growth,” he predicted.

“As a result, we still expect the official measure of house prices to rise by just 1.5 per cent over the course of 2019.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said that a Brexit decision will spur sales – but won’t bolster prices.

‘Brexit has created some pent-up demand and when we get a decision, whichever way it goes, we expect to see a spike in activity, not prices,” he said.

Leaf said he hopes for a “more balanced market” if Brexit negotiations make more progress, saying: “The reasons behind [the drop] are certainly not just to do with Brexit as we consistently hear on the doorsteps – affordability and tough lending criteria as other factors.

“Local factors are also highly relevant and activity varies quite a bit from area to area.”

By Joe Curtis

Source: City AM

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UK house prices rise in February – Halifax

UK house prices grew more than expected in February, according to the latest data from lender Halifax.

Annual house prices rose 2.8% in the three months to February, up from the 0.8% increase seen in January and beating expectations for a 1% jump.

On the month, house prices were up 5.9%, which was well above the 0.1% increase analysts had pencilled in. In the latest quarter, meanwhile, prices were 1.8% higher.

Halifax managing director Russell Galley said the shortage of houses for sale will certainly be playing a role in supporting prices.

“People are still facing challenges in raising a deposit which means we continue to expect subdued price growth for the time being. However, the number of sales in January was right on the five year average and, at over 100,000 for the fifth consecutive month, the overall resilience of the market is still evident.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that right now, he has little confidence in Halifax’s index as a reliable indicator of the housing market.

“Its extreme volatility – February’s gigantic increase follows a 3.0% month-to-month decline in January – undermines its validity. Like others, the index is seasonally adjusted, but it uses an outdated methodology which potentially is contributing to its excessive volatility.

“All other indicators suggest that house prices essentially are on a flat trend, not rising at the 1.8% three-month on three-month rate reported by Halifax. The support to house prices from the combination of faster growth in nominal wages and extremely low unemployment is being offset, for now, by anxiety about Brexit.

“The housing market likely will revive for a short period if, as we still expect, MPs sign off a Brexit deal by the summer. But a Brexit deal also will give the green light to the MPC to push through further increases in Bank Rate. With loan-to-income ratios at a record high, even modest increases in mortgage rates will greatly dampen house price growth. As a result, we still expect the official measure of house prices to rise by just 1.5% over the course of 2019.”

Howard Archer, chief economic advisor to the EY ITEM Club, agreed that Halifax house price measure’s monthly movements have been out of kilter with other measures.

Nationwide estimated annual house price inflation at just 0.4% in February and while the Bank of England reporting that mortgage approvals rose to a three-month high in January, most data and surveys point to a weak housing market.

“February’s spike in house prices reported by the Halifax does not fundamentally change our view of the housing market,” Archer said. “If the UK ultimately manages to leave the EU with a “deal” at the end of March, we expect UK house prices to eke out a modest gain of 1.5% over 2019.

“If the UK leaves the EU at the end of March without a Brexit “deal”, house prices could fall by around 5% in 2019.

“If Brexit is delayed for a few months, ongoing uncertainty is likely to weigh down on the housing market and could very well see house prices stagnate over 2019 or even fall slightly.”

By Iain Gilbert

Source: ShareCast

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UK house prices: Housing market ‘on its knees’ amid Brexit uncertainty

UK house price growth remained sluggish in February, as property experts warned the housing market is “on its knees”.

Prices rose just 0.4 per cent year on year compared to January’s 0.1 per cent rate of growth, new data published today reveals.

But prices actually slumped month on month, falling 0.1 per cent from January to an average of £211,304, down from £211,966, Nationwide’s house price index found.

“After almost grinding to a complete halt in January, annual house price growth remained subdued in February,” Robert Gardner, Nationwide’s chief economist, said, with experts attributing the lack of action to extended political uncertainty surrounding Brexit.

Pointing to “softened” market sentiment, he added: “Measures of consumer confidence weakened around the turn of the year and surveyors reported a further fall in new buyer enquiries over the same period.

“While the number of properties coming onto the market also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.”

Gardner said that despite a slow influx of new properties onto the market, momentum is firmly on the side of buyers after consumer confidence weakened in the new year.

Property experts said market confidence had “shattered” despite a strong employment rate, ultra-low borrowing rates and below-target inflation.

The latest English Housing Survey showed a slight rise in the home ownership rate last year to 63.5 per cent, up from 62.6 per cent in 2017.

March madness?

But property lender Octane Capital’s chief executive, Jonathan Samuels, warned “the UK property market remains firmly on its knees”.

He added: “The home ownership rate may have improved but the relationship many people have with bricks and mortar is changing irreversibly.

“March could be the month the property market finally succumbs to madness.”

All the ingredients for success

Andy Soloman, chief executive of business growth expert Yomdel, blamed the approach of Brexit uncertainty as a deal looks unlikely to be approved by parliament.

But he added: “With unemployment falling and wage growth on the up, we have all the ingredients required for a buoyant housing market, it’s just a case of sitting tight and waiting for the clouds of uncertainty to lift.”

Status quo until we leave the EU

Lucy Pendleton, founder director of independent estate agents James Pendleton, warned the current uncertainty clouding the market will be the norm until after the UK leaves the EU on 29 March.

“Assuming there’s no delay to Article 50, this is going to be the mood music until we get through to April,” she said.

“The market is falling in real terms but in the more expensive parts of the country, particularly London, it’s going to take a more significant retreat in prices to pull first-time buyers to the table in significantly greater numbers.”

Source: City AM

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UK house prices rise, broad picture still weak

UK house prices rose more than expected in December but the property market remains subdued ahead of Brexit, mortgage lender Halifax said on Tuesday.

House prices rose 2.2 percent, more than reversing a 1.2 percent fall in November and outstripping all forecasts in a Reuters poll of economists that had pointed to a 0.2 percent increase.

On an annual basis, prices rose 1.3 percent in the three months to December, again topping all forecasts that pointed to a 0.4 percent rise.

Still, with other surveys and official data mostly showing a slowing housing market, Halifax cautioned against reading too much into the strength of a single month’s figures.

“In 2019, we’re expecting continued stability in house prices with between 2 percent and 4 percent price inflation. This is slightly stronger than 2018, but still fairly subdued by modern comparison,” Russell Galley, managing director of Halifax, said.

“However, this expectation will clearly be dependent on the Brexit outcome, with risks to both sides of our forecast.”

Britain’s departure from the European Union, scheduled for March 29, remains unclear as lawmakers are expected next week to vote down the divorce deal that May struck with the EU in November.

Business chiefs and investors fear leaving the EU without a deal would slow trade, spook financial markets and dislocate supply chains for the world’s fifth-largest economy.

For graphic on UK house prices perk up in December, click tmsnrt.rs/2GYAhXm

Source: UK Reuters

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House-price growth slows to six-year low amid weak confidence

House price growth slowed sharply as 2018 drew to a close, with the UK recording its weakest annual growth in nearly six years.

Annual house price growth slowed from 1.9 per cent in November to 0.5 per cent in December, Nationwide Building Society has said.

But Scotland fared slightly better, with house prices in 2018’s fourth quarter 0.9 per cent higher annually, at £147,856 on average.

The 0.5 per cent increase in December was the weakest since February 2013. House prices were down by 0.7 per cent month-on-month in December.

Across the UK, the average house price in December was £212,281. London and some commuter belt areas surrounding the capital have seen house prices dip year-on-year.

In London, the average house price in the fourth quarter of 2018 was £466,988 – 0.8 per cent lower than the same period in 2017.

Northern Ireland was the strongest performer, with house prices in the fourth quarter of 2018 up by 5.8 per cent annually to reach £139,599 on average, followed by the East Midlands and Wales, where house prices lifted by 4 per cent annually.

Nationwide’s chief economist Robert Gardner said: “UK house price growth slowed noticeably as 2018 drew to a close, with prices just 0.5 per cent higher than December 2017.

“This marks a noticeable slowdown from previous months.” He said there have been indications a softening in the housing market was likely, including weakened consumer confidence.

Mr Gardner said: “The economic outlook is unusually uncertain. However, if the economy continues to grow at a modest pace, with the unemployment rate and borrowing costs remaining close to current levels, we would expect UK house prices to rise at a low single-digit pace in 2019.”

Source: Scotsman